- 📋 Quick Summary
- Quick Reference — All Programs at a Glance
- 1. First Home Savings Account (FHSA)
- 2. Home Buyers' Plan (HBP)
- 3. First-Time Home Buyer Incentive (FTHBI) — ❌ DISCONTINUED
- 4. GST/HST New Housing Rebate
- 5. Provincial Land Transfer Tax Rebates
- 6. Mortgage Stress Test Rules (2026)
- How to Stack These Programs (With Examples)
- Frequently Asked Questions
- Next Steps
First-Time Home Buyer in Canada: A 2026 Guide
Buying your first home in Canada involves navigating a maze of government programs, tax rebates, and mortgage rules — many of which can be stacked to save tens of thousands of dollars. This guide covers every program available to first-time buyers in 2026, with current rules, limits, and exactly how to combine them.
📋 Quick Summary
- FHSA — New since 2023. Best first step: $8,000/year tax-deductible, tax-free growth and withdrawal. Lifetime max $40,000.
- HBP — Withdraw up to $60,000 from your RRSP tax-free. Must repay over 15 years.
- FHSA + HBP can stack — Use both for the same home purchase. CRA-confirmed.
- FTHBI is discontinued — CMHC no longer accepts applications. Ignore outdated articles that mention it.
- GST/HST rebate — new 2025 rule for first-time buyers — On new homes up to $1M (agreements signed May 27, 2025 to Dec 31, 2030), first-time buyers get a full refund of the GST (and federal part of HST), up to $50,000. The benefit phases out to zero at $1.5M. Separate from the existing GST/HST New Housing Rebate ($6,300 max, homes under $450K).
- Provincial rebates vary wildly — BC gives up to $8,000, Ontario up to $4,000, Alberta charges nearly nothing to begin with.
- Max theoretical stack (couple, Ontario, new build): see the "Stacked Benefits" table later — each line is sourced.
Quick Reference — All Programs at a Glance
| Program | What You Get | Max Benefit | Stackable? |
| FHSA | Tax deduction + tax-free growth + tax-free withdrawal | $40,000 lifetime, $8,000/yr | ✅ With HBP |
| HBP | Tax-free RRSP withdrawal for down payment | $60,000 per person | ✅ With FHSA |
| FTHBI | ❌ DISCONTINUED | $0 — no longer available | N/A |
| GST/HST Rebate (new-home, FTHB) | Full refund of GST/HST federal portion on new homes ≤ $1M (signed May 27, 2025 – Dec 31, 2030) | Up to $50,000 | ✅ Standalone |
| GST/HST New Housing Rebate (old) | Partial refund of GST/HST for any buyer of a new/substantially-renovated home ≤ $450K | Up to $6,300 federal + provincial | ✅ Standalone |
| ON Land Transfer Tax | Refund on provincial LTT | Up to $4,000 | ✅ |
| BC Property Transfer Tax | Exemption on PTT | Up to $8,000 | ✅ |
| AB Land Transfer | No LTT exists | ~$250 in title fees | N/A |
1. First Home Savings Account (FHSA)
The FHSA is the single best tool for first-time buyers. It combines RRSP-style tax deductions with TFSA-style tax-free growth and withdrawal — and unlike the HBP, you never have to pay it back.
How It Works
| Rule | Detail |
| Annual contribution | $8,000 (2026) |
| Lifetime max | $40,000 |
| Carry-forward | Up to $8,000/year unused room carries forward indefinitely (max $16,000/year: $8,000 new + $8,000 carry-forward) |
| Tax deduction | Contributions reduce taxable income like an RRSP |
| Growth | Tax-free while inside the account |
| Withdrawal | Tax-free for a qualifying home purchase |
| Time limit | 15 years from opening, or age 71, or qualifying withdrawal |
| Eligibility | Canadian resident, 18+, first-time buyer (no owned home in current year or prior 4 years) |
| Transfer to RRSP | If you don't buy a home, funds can transfer to RRSP without tax penalty (doesn't use RRSP room) |
Why FHSA First
The FHSA should be your first stop for home savings because:
- Tax deduction now — Every dollar contributed reduces your taxable income
- Tax-free growth — No tax on gains, dividends, or interest while saving
- Tax-free withdrawal — No tax when you buy your home (unlike the HBP, which must be repaid)
- No repayment — It's not a loan. The money is yours, permanently
- Fallback to RRSP — If you never buy, funds transfer to RRSP without penalty
If you opened an FHSA and an RRSP on the same day with the same investment, the FHSA would leave you ahead by the amount of tax you'd eventually pay on RRSP withdrawals.
Start Your FHSA Tax-Free →Wealthsimple supports FHSA accounts with commission-free trading. $0 account fees.
2. Home Buyers' Plan (HBP)
The HBP lets you withdraw up to $60,000 from your RRSP to buy or build your first home — tax-free. You have 15 years to repay it.
How It Works
| Rule | Detail |
| Maximum withdrawal | $60,000 per individual ($120,000 per couple) |
| Repayment period | 15 years. For first withdrawals made between January 1, 2022 and December 31, 2028, the 15-year repayment period begins in the fifth year after the year of withdrawal (instead of the second); 1/15 of the withdrawn amount is then repaid annually over the remaining years. A 2026 withdrawal means the first repayment is due in 2031. |
| Annual minimum | 1/15 of withdrawn amount |
| Tax treatment | No tax on withdrawal if repaid on schedule; missed repayments added to taxable income |
| 90-day rule | RRSP funds must be in the account for 90+ days before withdrawal |
| Eligibility | First-time buyer (same 4-year lookback as FHSA); written agreement to buy/build before Oct 1 of year after withdrawal |
FHSA + HBP: Yes, You Can Use Both
The CRA has confirmed you can combine FHSA and HBP for the same qualifying home purchase. A couple could access:
- FHSA: $8,000 × 2 people = $16,000/year (up to $80,000 lifetime combined)
- HBP: $60,000 × 2 people = $120,000
- Total tax-advantaged: Up to $200,000
The tax deduction from FHSA contributions adds further savings — at a 33% marginal rate, the couple's $16,000 FHSA contribution generates $5,280 in tax refunds.
3. First-Time Home Buyer Incentive (FTHBI) — ❌ DISCONTINUED
The FTHBI is no longer accepting applications. CMHC has removed the program page entirely. Many articles online still reference it — ignore them.
The FTHBI was a shared-equity mortgage program where CMHC contributed 5% (resale) or 10% (new construction) toward your down payment in exchange for a share of your home's future value. It was discontinued due to low uptake and criticism that the shared-equity structure was disadvantageous to buyers.
What to use instead: The FHSA is a superior alternative. Unlike the FTHBI, the FHSA doesn't dilute your equity.
4. GST/HST New Housing Rebate
If you're buying a newly built home or substantially renovating, you may qualify for a rebate on the GST/HST paid. There are two separate rebates that can stack for first-time buyers: the long-standing GST/HST New Housing Rebate, and the new (May 2025) FTHB GST/HST Rebate.
Existing GST/HST New Housing Rebate (any buyer)
| Rule | Detail |
| Rebate amount | 36% of the GST / 36% of the federal portion of HST, plus a provincial portion in participating provinces |
| Maximum federal rebate | $6,300 (5% × $350,000 × 36% — the formula breaks at $350K and phases out above $350K, with no rebate above $450K under the old formula) |
| Full federal rebate | Home FMV ≤ $350,000 |
| Partial | FMV $350,001 – $449,999 |
| No rebate | FMV ≥ $450,000 under the old formula |
| Provincial portions (separate) | Ontario: 75% of the 8% provincial HST, up to $24,000.[1] BC: 71.43% of the 7% provincial PST component on the federal side, up to ~$13,000 (depends on tax base). Quebec: QST rebate via Revenu Québec, separate program. |
FTHB GST/HST Rebate (first-time buyers, new 2025)
On May 27, 2025, the federal government introduced a separate rebate for first-time home buyers buying new construction. It does not replace the existing rebate — they stack.
| Rule | Detail |
| Agreement window | Purchase agreements signed on or after May 27, 2025 and before January 1, 2031 (owner-built: construction begins in that window) |
| Substantial completion deadline | Before January 1, 2036 |
| Rebate amount | Up to 100% of the GST (or federal part of HST) paid on the qualifying purchase, up to a maximum of $50,000 |
| Full rebate (up to $50,000) | New home value ≤ $1,000,000 |
| Phase-out | Linear between $1,000,000 and $1,500,000 (e.g., a $1.25M home qualifies for a 50% rebate = up to $25,000) |
| No rebate | New home value ≥ $1,500,000 |
| Eligibility | First-time buyer (no home owned in current or prior 4 calendar years by the buyer or their spouse), occupying as principal residence, new build or substantial renovation |
Combined effect for first-time buyers: Together with the existing GST/HST New Housing Rebate (where applicable), the FTHB GST/HST Rebate provides a 100% GST rebate on new homes valued up to $1M, phasing out to zero at $1.5M.
Worked Example
A first-time buyer purchases a new construction home in Ontario at $900,000.
| Component | Detail |
| GST (5% of $900,000) | $45,000 |
| Provincial HST (8% of $900,000) | $72,000 |
| FTHB GST Rebate (100% of GST) | –$45,000 |
| Existing GST/HST New Housing Rebate (federal portion, phased out at $900K) | $0 (above $450K) |
| Ontario ENHR (75% of provincial HST, capped $24,000) | –$24,000 |
| Net GST/HST owing | $48,000 |
Source: Finance Canada — GST relief for first-time home buyers and CRA RC4028 — GST/HST New Housing Rebate.
5. Provincial Land Transfer Tax Rebates
Land transfer taxes are provincial — rates and first-time buyer rebates vary significantly.
Ontario
| Rule | Detail |
| Maximum refund | $4,000 |
| Full refund | First $368,000 of home value |
| Partial | Proportional above $368,000 |
| Eligibility | First-time buyer (permanent disqualification — if you've EVER owned a qualifying home, no rebate) |
| Toronto MLTT | Additional municipal rebate up to $4,475 |
Important: Ontario uses a stricter definition of "first-time buyer" for LTT than federal programs. Federal uses a 4-year lookback; Ontario permanently disqualifies anyone who has ever owned a qualifying home anywhere in the world.
British Columbia
| Rule | Detail |
| Full exemption | FMV ≤ $835,000 |
| Partial exemption | FMV $835,001–$860,000 |
| No exemption | FMV ≥ $860,000 |
| Maximum savings | $8,000 |
| Eligibility | Canadian citizen or permanent resident; lived in BC 1+ year; first-time buyer |
Alberta
No provincial land transfer tax. Title transfer fees are approximately $250 in total — the lowest in Canada.
Quebec
No general provincial FTHB land transfer tax rebate. The "welcome tax" (transfer duties) applies. Some municipalities offer local programs.
Other Provinces
Saskatchewan, Manitoba, New Brunswick, Nova Scotia, PEI, Newfoundland and Labrador: Land transfer taxes exist but first-time buyer rebates are limited or non-existent. Check your province's finance ministry website for current programs.
6. Mortgage Stress Test Rules (2026)
Before a lender approves your mortgage, you must pass the stress test — proving you can afford payments at a higher interest rate than you'll actually pay.
| Rule | Detail |
| Qualifying rate | Greater of: your contract rate + 2%, OR 5.25% |
| GDS ratio | Housing costs ≤ 39% of gross income |
| TDS ratio | Total debt payments ≤ 44% of gross income |
| Insured mortgages | Down payment <20% requires CMHC insurance |
| Amortization | 25 years (insured), up to 30 years (uninsured, as of 2024) |
Example: Stress Test in Practice
If you're offered a 4.50% mortgage rate:
- Qualifying rate = 6.50% (4.50% + 2%)
- You must demonstrate you can afford payments at 6.50%, not 4.50%
This reduces your maximum borrowing power by roughly 15-20% below what you could technically afford at the actual rate.
Source: OSFI B-20 Guideline
How to Stack These Programs (With Examples)
Example 1: Couple Buying a $700K Resale Home in Toronto
| Program | Benefit |
| FHSA (2 people × $8,000) | $16,000 tax-deductible contribution year 1 → ~$5,280 tax refund |
| HBP (2 people × $60,000 max) | Up to $120,000 RRSP withdrawal (tax-free if repaid) |
| Ontario LTT rebate | $4,000 (max on first $368,000) |
| Toronto MLTT rebate | Up to $4,475 |
| Total accessible (year 1) | $144,475 toward purchase + $9,755 in rebates/tax refunds |
Example 2: Single Buyer, $500K New Build in BC
| Program | Benefit |
| FHSA | $8,000 tax-deductible → ~$2,600 tax refund (33% bracket) |
| HBP | Up to $60,000 RRSP withdrawal |
| GST/HST rebate (new FTHB rules, May 27 2025+) | 100% of federal GST (or federal portion of HST) on new home ≤ $1M; 75% of provincial portion (BC) on a $500K home |
| BC PTT exemption | $8,000 (FMV ≤ $835,000 = full exemption) |
| Total accessible (year 1) | $68,000 (HBP) + ~$2,600 tax refund + ~$10,375 FTHB GST rebate (100% × $25K GST) + $8,000 BC PTT exemption |
Example 3: Couple, $400K New Build in Alberta
| Program | Benefit |
| FHSA (2 people) | $16,000 tax-deductible → ~$5,280 refund |
| HBP (2 people) | Up to $120,000 |
| GST rebate (old rules) | $6,300 max (FMV $350K = full; $400K = partial ~$3,000) |
| No provincial LTT | ~$250 in title fees only |
| Total accessible | $136,000 toward purchase + ~$8,300 in refunds/rebates |
Frequently Asked Questions
Can I use FHSA and HBP for the same home?
Yes. The CRA has confirmed FHSA and HBP can be combined for the same qualifying home purchase. You can use FHSA funds and HBP withdrawals toward the same down payment.
What if I open an FHSA but never buy a home?
You can transfer FHSA funds to your RRSP without tax consequences, and it won't use your RRSP contribution room. Alternatively, you can withdraw the funds — but they'll be taxed as income plus a withholding tax.
Is the FTHBI really discontinued?
Yes. CMHC removed all program pages. Applications are no longer accepted. Any online article still describing FTHBI as available is out of date.
What's the difference between Ontario and federal "first-time buyer" definitions?
Federal programs (FHSA, HBP, GST rebate) use a 4-year lookback: you haven't owned a qualifying home in the current year or prior 4 calendar years. Ontario's LTT rebate permanently disqualifies anyone who has ever owned a qualifying home anywhere in the world — the lookback is forever.
How much do I actually need for a down payment?
Minimum 5% on the first $500,000 + 10% on $500,001–$999,999 + 20% on $1,000,000+. Below 20% down requires CMHC mortgage insurance (2.8%–4.0% of mortgage amount, added to your loan).
Next Steps
- Open an FHSA before contributing to your RRSP — the FHSA gives you the deduction without the eventual tax bill
- Check your RRSP room on CRA My Account before planning HBP withdrawals
- Research provincial rebates specific to your province — land transfer tax savings can be substantial
- Get pre-approved to understand your stress-test borrowing limit before house hunting
- Read our TFSA vs RRSP vs FHSA guide for the full contribution priority breakdown
Related guides:
This guide is for educational purposes only. Tax rules, program eligibility, and mortgage regulations change. Verify current rules with the CRA, your province's finance ministry, and a qualified mortgage professional before making decisions.
Footnotes
- FHSA rules: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html ↩
- HBP rules: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html ↩
- GST/HST Rebate (RC4028): https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4028/gst-hst-new-housing-rebate.html ↩
- Ontario LTT Rebate: https://www.ontario.ca/document/land-transfer-tax/land-transfer-tax-refunds-first-time-homebuyers ↩
- BC PTT Exemption: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/first-time-home-buyers ↩
- OSFI B-20 Mortgage Underwriting: https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/infosheet-residential-mortgage-underwriting-practices-procedures-guideline-b-20 ↩
- Ontario Enhanced New Housing Rebate (ENHR): 75% of the 8% provincial portion of HST, capped at $24,000. Source: Ontario Ministry of Finance — Enhanced New Housing Rebate and the Ontario ENHR schedule within CRA RC4028. The $24,000 cap corresponds to the maximum ENHR on a home priced up to about $400,000 (75% × 8% × $400K = $24,000); the percentage is reduced for higher-priced homes. ↩